Financial Results for the Second Quarter Ended April 30, 2020
[Japan GAAP] (Consolidated)
Date:

June 17, 2020

Company Name and Code:

Tomoe Engineering Co., Ltd. and Subsidiaries - 6309
(URL: http://www.tomo-e.co.jp/index_e.html)

Stock exchange listing:

1st Section, Tokyo Stock Exchange

Head Office:5-15, Kitashinagawa 5-chome, Shinagawa-ku, Tokyo, Japan

President:

Hitoshi Yamamoto

Investor Relations Contacts:

Toshiaki Yakura, Director, General Manager of Accounting Division, Tel: (03) 3442-5127

Date to report Quarterly Consolidated Financial Statement: June 24, 2020
Date for Dividend Payment:

July 13, 2020

Preparation of Supplementary Explanatory Materials for Quarterly Operating Results: Yes
Briefing Session for Quarterly Operating Results: Not planned* Any fractional sums less than one million (or one thousand) yen are disregarded
1. Consolidated Financial Data for the Second Quarter Ended April 30, 2020
(1) Results of Operation (Consolidated)

Quarter Ended April 30, 2020
Quarter Ended April 30, 2019

(Percent: Change from the same quarter of the previous year)
Net Sales
Operating Income
Ordinary Income
Millions ofMillions ofMillions of
Yen
Percent
Yen
Percent
Yen
Percent
19,933
-10.0
1,395
-17.9
1,390
-18.8
22,136
5.8
1,700
28.9
1,713
27.3

Quarter Ended April 30, 2020
Quarter Ended April 30, 2019

Net Income Attributable to
Owners of the Parent
Millions of
Yen
Percent
909
-21.0
1,151
29.5

Net Income per Share

Fully Diluted Quarterly
Net Income per Share

Yen
91.14
115.41

Yen-(Note) Comprehensive income
Second Quarter ended April 30, 2020: 707 million yen (-36.4%)

Second Quarter ended April 30, 2019: 1,111 million yen (19.5%)(2) Financial Condition (Consolidated)

Quarter Ended April 30, 2020
Year Ended October 31, 2019

Total Assets (A)(Millions of Yen)
39,15739,070Net Assets (B)(Millions of Yen)
29,334
28,861Net Assets Ratio(B) / (A) (Percent)
74.9
73.9

(Reference) Net assets
Second Quarter ended April 30, 2020: 29,334 million yen

Year Ended October 31, 2019: 28,861 million yen

2. Dividend Status(Record Date)
Year Ended October 31, 2019Year Ending October 31, 2020
Year Ending October 31, 2020 (Prospect)First
Quarter-Interim
Term
23.50
23.50

Annual Dividend (Yen)Third
End ofQuarter
Fiscal Year
23.50

(Note) Revisions since the most recently released dividend projection: None

-

23.50

Annual
47.00
47.00

3. Forecast for Earnings for the Year Ending October 31, 2020 (Consolidated)(Percent change from the previous Full Business Year)Net Sales
Operating Income
Ordinary Income(Millions of Yen) (Percent) (Millions of Yen) (Percent) (Millions of Yen) (Percent)
Full Business Year40,900
-1.1
1,980
-16.7
1,980
-17.0
Net Income Attributable to Net Income per ShareOwners of the Parent(Millions of Yen) (Percent)
Yen
Full Business Year
1,280
-18.4
128.28(Note) Revisions since the most recently released dividend projection: None
Notes(1) Significant changes in subsidiaries during this period (changes in specific subsidiaries involving changes in thescope of consolidation): None
Number of new subsidiaries: __(Company names):
Number of eliminated subsidiaries: __(Company names):(2) Adoption of the specific accounting method to create quarterly consolidated financial statements: None
(3) Changes in accounting policies, accounting estimates, and retrospective restatements.
1) Change in accounting policies due to revision of accounting standard: None
2) Other changes than the above 1): None
3) Change in accounting estimates: None
4) Retrospective restatements: None
(4) Number of outstanding shares (Common stock)1) Number of outstanding shares as of quarter-end and year-end (including treasury stocks)
At April 30, 2020: 10,533,200 shares

At October 31, 2019: 10,533,200 shares

2) Number of treasury stocks as of quarter-end and year-end
At April 30, 2020: 554,861 shares

At October 31, 2019: 554,861 shares

3) Number of average shares (accumulated quarterly total)
At April 30, 2020: 9,978,339 shares

At April 30, 2019: 9,978,339 shares*The quarterly earnings report is exempt from the quarterly review by certified public accountant or audit firm.
*Explanations for appropriate use of the earnings forecast and other special instructions
The forward-looking statements such as a forecast of our financial results described herein are based on theinformation currently available to us and certain assumptions that we believe are reasonable. Actual results could
differ materially due to various factors.
Please refer to the Financial Results for the Quarter (Attachments) on page 4, (3) [Analysis of Future Forecast on
Quarterly Consolidated Earnings Forecast] of 1. [Qualitative Information on Quarterly Consolidated Operating
Results] for the operating results forecast.

Table of Contents (Supporting Data)

1. Qualitative Information on Quarterly Consolidated Operating Results....................................................2(1) Analysis of Operating Results................................................................................................................................2(2) Analysis of Financial Condition..............................................................................................................................3(3) Analysis of Future Forecast on Quarterly Consolidated Earnings Forecast.......................................................4
2. Quarterly Consolidated Financial Statements and Notes.................................................................................................5(1) Quarterly Consolidated Balance Sheet....................................................................................................5(2) Quarterly Consolidated Statement of Income & Quarterly Consolidated Statement of Comprehensive
Income......................................................................................................................................6
Quarterly Consolidated Statement of Income..............................................................................................6
Quarterly Consolidated Statement of Comprehensive Income.....................................................................7(3) Quarterly Consolidated Statement of Cash Flows..............................................................................................8(4) Notes on Quarterly Consolidated Financial Statements.....................................................................................10(Note for premise of going concern)....................................................................................................10(Notes for significant changes in shareholder’s equity)......................................................................................10(Segment information)....................................................................................................10

1

1. Qualitative Information on Quarterly Consolidated Operating Results(1) Analysis of Operating Results
During the second quarter consolidated year-to-date period, Japan’s economy suffered negative growth because oflower demand, primarily in personal consumption, capital investment, and exports, all of which were affected by therising number of coronavirus infections. The global economy has deteriorated rapidly as well, against the backdropof the pandemic’s spread from China to Europe and the United States and concomitant constraints on economic
activity.
Given these circumstances, net sales for the Tomoe Engineering Group for the consolidated second quarterdecreased 10.0% from the same period last year to 19,933 million yen because of decreasing sales in both the
Machinery & Equipment Business and Chemical Products Business. From the earnings aspect, operating
income was 1,395 million yen, 17.9% down from the same period last year because of lower profit in the Machinery& Equipment Businesses, while ordinary income came to 1,390 million yen, 18.8% down from the same period lastyear. Net income attributable to owners of the parent was 909 million yen, 21.0% down from the same period lastyear.
Operating results by segment were as follows.
(Machinery & Equipment Business)
In the Machinery & Equipment Business, consolidated net sales for the year-to-date period were 5,441 million yen,
17.9% down from the same period last year. Despite growth in net sales of machinery, equipment and construction
works for domestic public sector demand based on receipt of orders for large-scale projects, and higher net sales ofmachinery, equipment and construction works for domestic private sector demand that was concentrated in thechemical industry, foods, and semiconductors, overseas net sales of machinery, equipment and construction works
exhibited a reactionary drop from the large-scale projects for China, Southeast Asia, and Europe and the UnitedStates that drove growth in the same period last year, while sales of components and repair services for overseas
markets and for domestic public sector demand declined as well, pulling total net sales lower.
(Millions of Yen)
Productclassification

Machinery

Equipment andconstruction
works

Components
and repair
services

TOTAL

April, 2020

394

801

1,776

2,972

April, 2019

232

342

2,078

2,652

% change

69.5%

134.4%-14.5%

12.1%

April, 2020

398

120

944

1,464

April, 2019

253

90

1,040

1,385

% change

57.1%

33.7%

-9.2%

5.7%

April, 2020

135

0

868

1,004

Overseas

April, 2019

1,250

34

1,305

2,591

markets% change-89.1%--33.5%-61.2%

April, 2020

929

922

3,590

5,441

April, 2019

1,737

467

4,424

6,629

% change-46.5%

97.4%-18.9%-17.9%

Public sector

Private sector

TOTAL

With respect to earnings during the period, operating income was 604 million yen, 36.1% down from the same period
one year earlier, reflecting the decline in gross margin that resulted from lower net sales.
2(Chemical Products Business)
In the Chemical Products Business, net sales of transport materials for semiconductor manufacturing applications in
the electronic materials sector increased, but on the other hand net sales of materials for motor vehicles, housing
and construction applications in the industrial materials sector, resin and products for domestic and overseas
markets in the synthetic resin sector, and materials for semiconductor manufacturing devices in the advanced
materials sector decreased, all of which were affected by the rising number of coronavirus infections. As a result,net sales for consolidated second quarter year-to-date period were 14,491 million yen, 6.5% down from the same
period last year.
(Millions of Yen)
April, 2019

April, 2020% change

Synthetic resin sector

3,823

3,529

-7.7%

Industrial materials sector

4,975

4,209

-15.4%

Chemical products sector

3,118

3,144

0.8%

Advanced materials sector

1,684

1,603

-4.8%

Electronic materials sector

1,720

1,870

8.7%

184

133

-27.2%

15,507

14,491-6.5%

Other products (foreign liquor)
Total

With respect to earnings, operating income was 791 million yen, 4.9% up from the same period of the prior year,
because of improved gross-profit margin and decreased selling costs.
(2) Analysis of Financial Condition[1] Assets, Liabilities, and Net Assets
Total assets as of the end of the consolidated second quarter under review were 39,157 million yen, increased by
86 million yen from the end of the previous consolidated fiscal year. This mainly reflected decreased notes andaccounts receivable–trade, and cash and deposits, and increased electronically recorded monetary claims, and raw
materials and supplies.
Liabilities were 9,823 million yen, decreased by 385 million yen from the end of the previous consolidated fiscal year,
mainly because of increased electronically recorded monetary debt, and advances received, and decreased notes
and accounts payable-trade, and provision for bonuses.
Net assets stood at 29,334 million yen, increased by 472 million from the end of the previous consolidated fiscal
year. This mainly reflected a decrease in valuation difference on available-for-sale securities, and an increase inretained earnings recorded under quarterly net income attributable to owners of the parent.
As a result of the above changes, the equity ratio at the end of the consolidated second quarter under review
stood at 74.9%, increased by 1.0 point from 73.9% at the end of the previous consolidated fiscal year.

3[2] Cash Flow Status
Cash and cash equivalents (“cash”) as of the end of the consolidated second quarter under review decreased by
4,395 million yen from the end of the previous consolidated fiscal year to 7,752 million yen, despite positive cash flow
provided by operating activities, reflecting expenditures for both investment and financing activities. The status ofeach consolidated cash flow and their factors during the second quarter are as follows:(Net Cash Provided by (Used in) Operating Activities)
Net cash provided by operating activities during the consolidated second quarter under review totaled 157 million
yen. Inventory increased by 737 million yen, payment of income taxes and provision for bonuses decreased by
486 million yen and 330 million yen respectively, and income before income taxes and advances received
increased by 1,388 million yen and by 332 million yen respectively. Net cash provided by operating activities
decreased by 1,808 million yen compared to 1,965 million yen provided for the same consolidated quarteryear-to-date period of the previous year.
(Net Cash Provided by (Used in) Investing Activities)
Net cash used by investing activities during the consolidated second quarter under review reflected expenditures
totaling 4,320 million yen. This reflected a difference of 4,000 million yen between deposits and disbursements totime deposits. Net cash used by investing activities increased by 1,083 million yen compared to 3,237 million yen
used for the same consolidated quarter year-to-date period of the previous year.
(Net Cash Provided by (Used in) Financing Activities)
The decrease in cash as a result of financing activities during the consolidated second quarter under review cameto 234 million yen. This reflected the payment of cash dividends of 234 million yen. Net cash used in investing
activities decreased by 9 million yen compare to 244 million yen used for the same consolidated quarteryear-to-date period of the previous year.
(3) Analysis of Future Forecast on Quarterly Consolidated Earnings Forecast
There are no revisions to the consolidated earnings forecast figures for the fiscal year ending October 31, 2020 thatwere announced in the “Notice on changes in earnings forecast” released on June 12, 2020.

4

2. Quarterly Consolidated Financial Statements and Notes(1) Quarterly Consolidated Balance Sheet (Second Quarter)(Thousands of Yen)
End of Previous YearEnd of Second Quarter(October. 31, 2019)(April 30, 2020)

AssetsCurrent Assets
Cash and Deposits

12,147,981

11,752,808

Notes and Accounts Receivable-Trade

10,432,830

9,829,541

Electronically Recorded Monetary Claims

1,904,539

2,576,224

Merchandise and Finished Goods

3,242,217

3,236,082

Work in Process

1,200,360

1,371,753

Raw Materials and Supplies

1,014,166

1,584,490

Others381,860

323,893

Allowance for Doubtful Accounts
Total Current Assets-63,652-62,463

30,260,304

30,612,331

4,608,252

4,571,695

Accumulated Depreciation-1,954,347-1,957,654

Buildings and Structures, Net

2,653,904

2,614,040

Machinery, Equipment and Vehicles

3,771,107

3,776,652-3,284,685-3,321,622

486,422455,030

1,930,720

1,930,778

123,271

123,967

1,036,746

1,051,314-955,308-944,631

81,437

106,682

5,275,756

5,230,498

129,094

128,813

Investment Securities

1,393,589

1,110,944

Guarantee Deposits

349,795

398,657

1,588,079

1,606,559

Deferred Tax Assets

16,446

11,550

Others80,56281,504

Allowance for Doubtful Accounts-22,681-23,051

Total Investments and Other Assets

3,405,791

3,186,164

Total Noncurrent Assets

8,810,642

8,545,476

Total Assets

39,070,946

39,157,808

Noncurrent Assets
Property, Plant and Equipment
Buildings and Structures

Accumulated Depreciation
Machinery, Equipment and Vehicles, Net
Land
Construction in progress
Others
Accumulated Depreciation
Others, Net
Total Property, Plant and Equipment
Intangible Assets
Investments and Other Assets

Net Defined Benefit Assets5

(Thousands of Yen)
End of Previous YearEnd of Second Quarter(October. 31, 2019)(April 30, 2020)

Liabilities and Net Assets
Liabilities
Current Liabilities
Notes and Accounts Payable-Trade

4,165,190

3,506,191

Electronically Recorded Monetary Debt

1,822,509

2,403,407

Accounts Payable-Others

821,503552,087

Income Taxes Payable

430,816

212,679

Advances Received

577,512910,133

Provision for Bonuses

1,160,657

830,033

Provision for Directors' Bonuses

72,627

27,577

Allowance for Product Warranty

313,350

286,858

Others

199,898

334,7449,564,068

9,063,714

5,460

5,460

Total Current Liabilities
Noncurrent Liabilities
Provision for Directors' Retirement Benefits
Net Defined Benefit Liabilities

63,20864,354

Deferred Tax Liabilities

576,715

689,959

Total Noncurrent Liabilities

645,384

759,774

Total Liabilities

10,209,452

9,823,488

Capital Stock

1,061,210

1,061,210

Capital Surplus

1,483,410

1,483,410

Retained Earnings

26,043,930

26,718,842-363,977-363,977

Total Shareholders’ Equity

28,224,573

28,899,485

Accumulated Other Comprehensive Income
Valuation Difference on Available-for-Sale
Securities
Deferred Gains or Losses on Hedges

439,359

234,553

1,954-2,240Foreign Currency Translation Adjustment

83,28299,365

Total Adjustment on Net Defined Benefit

112,324

103,156

Total Accumulated Other Comprehensive Income

636,920434,834

Total Net Assets

28,861,494

29,334,319

Total Liabilities and Net Assets

39,070,946

39,157,808

Net Assets
Shareholders’ Equity

Treasury Stock5(2) Quarterly Consolidated Statement of Income & Quarterly Consolidated Statement of Comprehensive
IncomeQuarterly Consolidated Statement of Income (Second Quarter)(Thousands of Yen)
Second Quarter Ended

Second Quarter Ended

April 30, 2019

April 30, 2020

Net Sales

22,136,224

19,933,464

Cost of Sales

16,928,304

15,168,940

5,207,919

4,764,524

3,507,279

3,368,708

1,700,640

1,395,816

Interest Income

786

1,200

Dividends Income

13,297

14,522Rent Income

3,585

3,585

Foreign Exchange Gain

12,183－

Others16,445

10,896

46,29730,204

Interest Expenses

20,908

5,066

Commission Paid

7,487

7,495

Sales Discount

3,591

3,219

－

15,848

1,768

3,873

Total Non-Operating Expenses

33,75635,503

Ordinary Income

1,713,181

1,390,517

5,550

1,921

5,550

1,921

1,707,631

1,388,596

Income Taxes-Current

542,534

270,313

Income Taxes-Deferred

13,535

208,880

Total Income Taxes

556,069

479,193

Net Income or Net Loss (-)

1,151,561

909,402

1,151,561

909,402

Gross Profit
Selling, General and Administrative Expenses
Operating Income
Non-Operating Income

Total Non-Operating Income
Non-Operating Expenses

Foreign Exchange Loss
OthersExtraordinary Losses
Loss on Evaluation of Investment Securities
Total Extraordinary Losses
Income before Income Taxes and Minority Interests

Net Income or Net Loss (-)
Attributable to Owners of the Parent

6

Quarterly Consolidated Statement of Comprehensive Income (Second Quarter)(Thousands of Yen)
Second Quarter Ended

Second Quarter Ended

April 30, 2019

April 30, 2020

1,151,561

909,402-24,480-204,806

Deferred Gains or Losses (-) on Hedges

822-4,195

Foreign Currency Translation Adjustment-5,78516,083

Net Defined Benefit-10,503-9,168

Total Other Comprehensive Income-39,945-202,086

1,111,615

707,316

1,111,615

707,316Net Income
Other Comprehensive Income
Valuation Difference on Available-for-sale Securities

Comprehensive Income(Breakdown)Comprehensive Income Attributable to Owners of the
Parent7

(3) Quarterly Consolidated Statement of Cash Flows(Thousands of Yen)
Second Quarter Ended

Second Quarter Ended

April 30, 2019

April 30, 2020

Net Cash Provided by (Used in) Operating Activities
Income before Income Taxes

1,707,631

1,388,596

Depreciation and Amortization

177,632

169,817

Increase (Decrease) in Provision for Bonuses(255,091)(330,778)

Increase (Decrease) in Provision for Directors' Bonuses(35,986)(45,049)

Increase (Decrease) in Allowance for Product Warranty

172,303(26,492)

Increase (Decrease) in Net Defined Benefit Liability

2,388

1,146

Decrease (Increase ) in Net Defined Benefit Asset(14,159)(22,525)57(1,334)

Interests and Dividends Income(14,083)(15,723)

Interest Expenses

20,9085,066

Foreign Exchange Losses (Gains)

19,716

13,649(107,744)(73,958)

Decrease (Increase) in Inventories

511,229(737,074)

Increase (Decrease) in Notes and Accounts Payable-Trade(13,773)(74,006)

Valuation Difference in Investment Securities (Gains)

5,550

1,921

Increase (Decrease) in Accounts Payable-Others

57,030(135,213)

Increase (Decrease) in Advances Received

196,088332,283

Others, Net

44,646

182,064

2,474,344

632,387

Interests and Dividends Income Received

14,03015,806

Interest Expenses Paid

(20,915)(5,073)

Income Taxes Returned (Paid)(502,397)(486,088)

Net Cash Provided by (Used in) Operating Activities

1,965,061

157,031

Increase (Decrease) in Allowance for Doubtful Accounts

Decrease (Increase) in Notes and Accounts
Receivable-Trade

Sub Total8

(Thousands of Yen)
Second Quarter Ended

Second Quarter Ended

April 30, 2019

April 30, 2020

Net Cash Provided by (Used in) Investment Activities
Disbursement to Time Deposits(6,000,000)(8,000,000)

Withdrawal from Time Deposits

3,000,000

4,000,000

Purchase of Property, Plant and Equipment(199,281)(237,462)

935－

Purchase of Intangible Fixed Assets(20,953)(23,436)

Purchase of Investment Securities(10,546)(10,786)

Payments of Loans Receivable(2,040)(920)

Collection of Loans Receivable

1,895

2,015

Guarantee Deposits (Increase)(5,622)(48,554)

Others, Net(1,757)(1,692)(3,237,370)(4,320,837)

Cash Dividends Paid

(244,469)(234,490)

Net Cash Provided by (Used in) Financing Activities(244,469)(234,490)(11,699)

3,124

Net Increase (Decrease) in Cash and Cash Equivalents
Cash and Cash Equivalents at Beginning of Period(1,528,476)(4,395,172)

9,354,256

12,147,981

Cash and Cash Equivalents at End of This Quarter

7,825,779

7,752,808

Proceeds from Sales of Property, Plant and Equipment

Net Cash Provided by (Used in) Investment Activities
Net Cash Provided by (Used in) Financing Activities

Cash and Cash Equivalents
Effect of Exchange Rate Change on Cash and Cash
Equivalents9(4) Notes on Quarterly Consolidated Financial Statements(Note for premise of going concern)
There are no pertinent matters to report.
(Notes for significant changes in shareholder’s equity)
There are no pertinent matters to report.
(Segment information, etc.)[Segment information]
Second Quarter Ended April 30, 2019
Information Pertaining to the Amount of Net Sales, Profit or Loss of Each Reporting Segment(Thousands of Yen)
Reported Segment

Net Sales
Net Sales to UnaffiliatedCustomers
Internal Net Sales among
Segments or AmountTransferred
Total
Segment Profit

Machinery & Equipment
Business

Chemical Products
Business

6,629,012

Total

Grand Total

15,507,212

22,136,224

22,136,224

-

-

-

-

6,629,012

15,507,212

22,136,224

22,136,224

945,684

754,956

1,700,640

1,700,640(Note) The total amount of segment profit is identical to the operating income reported on the Quarterly Consolidated Statements of Income.

Second Quarter Ended April 30, 2020
Information Pertaining to the Amount of Net Sales, Profit or Loss of Each Reporting Segment(Thousands of Yen)
Reported Segment

Net Sales
Net Sales to UnaffiliatedCustomers
Internal Net Sales among
Segments or AmountTransferred
Total
Segment Profit

Machinery & Equipment
Business

Chemical Products
Business

5,441,781

Total

Grand Total

14,491,683

19,933,464

19,933,464

-

-

-

-

5,441,781

14,491,683

19,933,464

19,933,464

604,144791,672

1,395,816

1,395,816(Note) The total amount of segment profit is identical to the operating income reported on the Quarterly Consolidated Statements of Income.

10